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The possible adverse impact of innovation subsidies: some evidence from a bivariate switching model

Author

Listed:
  • Alessandra Catozzella

    (Università Cattolica del Sacro Cuore - Piacenza)

  • Marco Vivarelli

    (Università Cattolica del Sacro Cuore - Piacenza)

Abstract

The impact of public funding is estimated using firm-level Italian data. Results from a bivariate endogenous switching model show that innovative productivity is negatively affected by the innovation subsidy; far from ‘doing better' as a result of government intervention, supported firms appear to exhaust their advantage through merely increasing their innovative expenditures.

Suggested Citation

  • Alessandra Catozzella & Marco Vivarelli, 2012. "The possible adverse impact of innovation subsidies: some evidence from a bivariate switching model," Economics Bulletin, AccessEcon, vol. 32(1), pages 648-661.
    • Handle: RePEc:ebl:ecbull:eb-12-00062
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    References listed on IDEAS

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    1. Charles Bérubé & Pierre Mohnen, 2009. "Are firms that receive R&D subsidies more innovative?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(1), pages 206-225, February.
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    5. Bruno Van Pottelsberghe & Henri Capron, 1997. "Public support to business R&D: a survey and some new quantitative evidence," ULB Institutional Repository 2013/6283, ULB -- Universite Libre de Bruxelles.
    6. Saul Lach, 2002. "Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 369-390, December.
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    8. Branstetter, Lee & Sakakibara, Mariko, 1998. "Japanese Research Consortia: A Microeconometric Analysis of Industrial Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 207-233, June.
    9. Czarnitzki, Dirk, 2002. "Research and development: financial constraints and the role of public funding for small and medium-sized enterprises," ZEW Discussion Papers 02-74, ZEW - Leibniz Centre for European Economic Research.
    10. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053.
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    Citations

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    Cited by:

    1. Laura Barbieri & Daniela Bragoli & Flavia Cortelezzi & Giovanni Marseguerra, 2015. "Public Support to Innovation Strategies," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1509, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    2. Segarra Blasco, Agustí, 1958- & Teruel, Mercedes & Bové Sans, Miquel Àngel, 2014. "A territorial approach to R&D subsidies: Empirical evidence for Catalonian firms," Working Papers 2072/242275, Universitat Rovira i Virgili, Department of Economics.
    3. García-Quevedo, José & Pellegrino, Gabriele & Vivarelli, Marco, 2014. "R&D drivers and age: Are young firms different?," Research Policy, Elsevier, vol. 43(9), pages 1544-1556.
    4. Luca Stanca & Herbert Dawid & Mariacristina Piva & Marco Vivarelli, 2015. "Are R&D investments by incumbents decreasing in the availability of complementary assets for start-ups?," LEM Papers Series 2015/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Sara Amoroso, 2017. "Multilevel heterogeneity of R&D cooperation and innovation determinants," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(1), pages 93-120, April.
    6. L. Colombo & H. Dawid & M. Piva & M. Vivarelli, 2017. "Does easy start-up formation hamper incumbents’ R&D investment?," Small Business Economics, Springer, vol. 49(3), pages 513-531, October.
    7. Erol Taymaz & Yesim Ucdogruk, 2013. "The Demand for Researchers: Does Public R&D Support Make a Difference?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 90-99, June.
    8. Blind, Knut & Petersen, Sören S. & Riillo, Cesare A.F., 2017. "The impact of standards and regulation on innovation in uncertain markets," Research Policy, Elsevier, vol. 46(1), pages 249-264.
    9. Colombo, Luca & Dawid, Herbert & Piva, Mariacristina & Vivarelli, Marco, 2013. "Does Easy Start-Up Formation Hamper Incumbents' R&D Investment? A Theoretical and Empirical Analysis," IZA Discussion Papers 7302, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    innovation subsidy; policy evaluation; product innovation; bivariate endogenous switching model;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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